Progres Proyek MRTPekerja melakukan perawatan segment tunnel (ruas terowongan) Mass Rapid Transit (MRT) di kawasan Senayan, Jakarta, Kamis (7/1). Hingga kini pengeboran untuk bor Antarareja I telah mencapai 327 meter atau tepat berada di Stasiun Senayan yang terletak di depan pusat perbelanjaan Ratu Plaza Jakarta Pusat, sementara Antareja II telah mencapai 277 meter menuju Stasiun Senayan dari Bundaran Senayan. (ANTARA FOTO/Sigid Kurniawan)
Progres Proyek MRTPekerja memeriksa bor Antareja I yang digunakan untuk mengebor terowongan Mass Rapid Transit (MRT) di Stasiun Senayan, Jakarta, Kamis (7/1). Hingga kini pengeboran untuk bor Antarareja I telah mencapai 327 meter atau tepat berada di Stasiun Senayan yang terletak di depan pusat perbelanjaan Ratu Plaza Jakarta Pusat, sementara Antareja II telah mencapai 277 meter menuju Stasiun Senayan dari Bundaran Senayan. (ANTARA FOTO/Sigid Kurniawan)
Progres Proyek MRTPekerja beraktivitas saat berlangsung pengerjaan konstruksi terowongan Mass Rapid Transit (MRT) di kawasan Senayan, Jakarta, Kamis (7/1). Hingga kini pengeboran untuk bor Antarareja I telah mencapai 327 meter atau tepat berada di Stasiun Senayan yang terletak di depan pusat perbelanjaan Ratu Plaza Jakarta Pusat, sementara Antareja II telah mencapai 277 meter menuju Stasiun Senayan dari Bundaran Senayan. (ANTARA FOTO/Sigid Kurniawan)
Progres Proyek MRTPekerja memeriksa bor Antareja I yang digunakan untuk mengebor terowongan Mass Rapid Transit (MRT) di Stasiun Senayan, Jakarta, Kamis (7/1). Hingga kini pengeboran untuk bor Antarareja I telah mencapai 327 meter atau tepat berada di Stasiun Senayan yang terletak di depan pusat perbelanjaan Ratu Plaza Jakarta Pusat, sementara Antareja II telah mencapai 277 meter menuju Stasiun Senayan dari Bundaran Senayan. (ANTARA FOTO/Sigid Kurniawan)
Indonesia May See Investment Boost From China's Carmakers: BKPM
Jakarta. Franky Sibarani, chief of Indonesia's Investment Coordinating Board, on Thursday voiced his optimism over Indonesia's ability to draw more foreign direct investments from China's automotive industry, thanks to the archipelago's relatively low car ownership rate and high demand for more affordable vehicles.
“The government is trying to turn Indonesia into a production base for the [Association of Southeast Asian Nation's] automotive industry,” Franky said on the sideline of his visit to Saic General Motor Wuling’s plant in Cikarang, West Java.
Saic General Motor Wuling, a joint venture between General Motors China, Shanghai-based SAIC Motor and Liuzhou-based Liuzhou Wuling Motors, started construction of its Cikarang plant in August last year.
Franky said the company has sunk $43.5 million out of its $397.4 million investment plan into the project.
Indonesia's relatively low car ownership trend provides manufacturers and dealers the opportunity to invest in the country, he added, citing a report conducted by the International Organization of Motor Vehicle Manufacturers that said car ownership in Indonesia reached 77 units per 1,000 people. This compared to 397 units per 1,000 people in Malaysia.
Investment realization in the automotive industry grew 7 percent to $1.4 billion in the January-September period last year, from the same nine months in 2014, with the bulk of investment coming from Japanese automakers, which has dominated the Indonesian market.
Investment commitment in the automotive industry reached $851 million in the period, growing 39 percent compared to $611 million a year earlier.
“[Chinese investors] need a success story to increase its investment realization and we hope Wuling’s investment can be part of China’s success story in Indonesia,” Franky said.
Wuling, through its 300,000-square meter Cikarang plant will produce 120,000 multi-purpose seven-seater vehicles and automotive parts, as well as accessories.
The company has yet to unveil the price of these cars, but local media have reported the maximum price to be at around Rp 149 million ($10,681).
Chinese cars have failed to grab a significant share of the Indonesian market. Wuling’s predecessors Chery Automobile, China’s largest indigenous car maker and Geely International, failed to steal the heart of Indonesian consumers several years ago, despite it offering relatively cheap cars.
Incentive needed
Saic General Motor Wuling aims to finish construction on its plant by the end of this year.
The company is set to start commercial operations of its Cikarang plant in February next year and hopes to introduce products by July 2017.
The company has asked the Investment Coordinating Board (BKPM) for additional incentives, which include a faster import process for machines and raw materials in the company’s master list of capital goods and materials, according to Xu Feiyun, Saic General Motor Wuling president director.
Franky said the government will review Saic’s request after receiving the company’s investment progress report.
China dominates investment plans in Indonesia
Last year, investment plans from China alone reached Rp 277 trillion, the highest with regards to the country of origin, followed by Singapore (Rp 203 trillion) and Japan (Rp 100.6 trillion).
The investment realization ratio from China, however, only reached 7 percent of the planned Rp 277 trillion last year, or much lower than Japan’s realized 60 percent.
“Japan and China are our priority countries. We hope our marketing officers can help identify new investment plans and push investors to use BKPM’s three-hours license service,” Franky said.
Indonesia May See Investment Boost From China's Carmakers: BKPM | Jakarta Globe
Indonesia's Economy to Pick Up Pace After Bottoming Out in 2015: World Bank
Jakarta. The World Bank is predicting faster economic growth for Indonesia this year, confident that the nation's slowdown likely bottomed out in 2015.
In its January 2016 "Global Economic Prospects" report, the multilateral lender sees Indonesia's growth accelerating to 5.2 percent on average in the 2016-18 period after dropping to its lowest rate of 4.7 percent last year.
"This assumes implementation of a reform package announced by the government in September-October 2015 to unlock investment and boost productivity growth," the report said.
President Joko Widodo's administration released a series of economic packages last year in a bid to prop up a domestic economy that was being challenged by weaker exports, slower consumer purchasing power and a weakening currency.
The World Bank's optimism echoed similar sentiments from Bank Indonesia, which forecast economic growth to rebound this year at 5.2 percent-5.6 percent from a 4.7 percent-4.8 percent forecast for 2015.
However, the World Bank's report also noted that expected weak commodity prices for this year may require Indonesia to strengthen its fiscal institutions as well as broad its trade products.
"Weaker commodity prices would exacerbate the impact on commodity exporters" like Indonesia, Malaysia and Mongolia, the report said.
"On the revenue side, there is a need to broaden tax bases" for countries like Indonesia, Malaysia, Philippines, to "reduce reliance on commodity-related revenues."
The report also said commodity producers like Indonesia need to "enhance fiscal institutions to improve the management of fluctuations in natural-resource prices" to anticipate the decline in commodity prices.
Global growth
According to the report, weak growth among major emerging markets will likely continue weighing on global economic growth in 2016, but it said "economic activity should still pick up modestly to a 2.9 percent pace, from a 2.4 percent growth in 2015, as advanced economies gain speed."
"A slowdown in major emerging markets would dampen regional growth through strong trade linkages and increasingly through financial market integration. Econometric estimates indicate that spillovers could be sizable, with a one-off [but persistent] unexpected 1 percentage point decline in China’s growth lowering growth in the rest of Asia by 0.5-1.4 percentage points after two years," it said.
The World Bank said growth in China, the world's most populous nation, is forecast to retreat to 6.7 percent in 2016 from an estimated 6.9 percent in 2015.
Indonesia's Economy to Pick Up Pace After Bottoming Out in 2015: World Bank | Jakarta Globe